Canada could be the last of the three North American countries to ratify the new trade deal, Prime Minister Justin Trudeau said. The United States, Mexico and Canada agreed last week to revised terms for the USMCA to replace the 1994 North American Free Trade Agreement. Mexico has already ratified the deal and the U.S. House of Representatives will consider legislation on Thursday to implement the pact. Canadian legislators, however, are not due back from a winter break until Jan 27. Trudeau’s minority Liberal government must work more closely with opposition parties to push through legislation. Trudeau said he was reasonably confident his government would find enough votes to approve the treaty. Canada’s two main opposition parties suggested last week they could move to delay ratification, accusing the Liberal government of botching revisions to the treaty.
European shares tried to settle as gains for Swedish truck maker Volvo and defensive sectors helped counter worries about a hard Brexit that continued to pressure UK mid-cap shares. Domestically focused UK stocks fell 0.4% as worries about Britain's Prime Minister Boris Johnson taking a hard line on Brexit lingered. The exporter heavy FTSE index rose 0.2%, as pound erased all its gains made on the Tory victory. Against the euro, the pound hit a two-week low of 85.17 pence per euro. In the United States, upbeat economic news had helped the S&P 500 reach a record for the fourth straight session, building on its 27% gain this year. The Dow Jones ended up 0.19%, the S&P 500 gained 0.07% and the Nasdaq 0.11%.
Sterling’s slide gave the dollar index a lift to 97.243 extending a bounce from last week’s five-month low of 96.588. The euro also surged on the pound and was a shade softer on the dollar at $1.1134. The yen was little changed at $109.45. Spot gold idled at $1,476.63 per ounce, after a couple of very quiet sessions. In the absence of fresh news, the Chinese yuan remained around 7CNH to the dollar. The greenback was a little weaker on the euro at $1.1131. The kiwi was knocked by an unexpectedly steep drop in dairy prices, the top national export, pushing the currency to a week low of $0.6555. The Australian dollar held near its lowest in a week as well ahead of crucial employment data due tomorrow. A disappointment could bring forward another rate cut, especially after the Reserve Bank of Australia (RBA) foreshadowed possible easing in the December meeting minutes released yesterday.
Oil prices dropped after U.S. industry data showed a surprise build in crude inventories, but expectations for firmer demand next year kept losses in check. Brent, the international benchmark rose 1.2% to $66.10 a barrel. West Texas Intermediate fell 46 cents, to $60.48 per barrel. U.S. crude inventories climbed 4.7 million barrels in the week to Dec. 13 to 452 million, well beyond expectations, data from industry group the American Petroleum Institute showed.